Hitting the Books: How the 'Godfather of Cybercrime' got his start on eBay
From bunk Beanie Babies to signal-stealing cable boxes, Brett Johnson has scammed them all.
The internet has connected nearly everybody on the planet to a global network of information and influence, enabling humanity's best and brightest minds unparalleled collaborative capabilities. At least that was the idea, more often than not these days, it serves as a popular medium for scamming your more terminally-online relatives out of large sums of money. Just ask Brett Johnson, a reformed scam artist who at his rube-bilking pinnacle, was good at separating fools from their cash that he founded an entire online learning forum to train a new generation of digital scam artist.
Johnson's cautionary tale in one of many in the new book, Fool Me Once: Scams, Stories, and Secrets from the Trillion-Dollar Fraud Industry, from Harvard Business Review Press. In it, Professor of Forensic Accounting at DePaul University, Dr. Kelly Richmond Pope, chronicles some of the 20th and 21st century's most heinous financial misdeeds — from Bernie Madoff's pyramid schemes to Enron and VW, and all the Nigerian Princes in between — exploring how the grifts worked and why they often left their marks none the wiser.
Reprinted by permission of Harvard Business Review Press. Excerpted from Fool Me Once: Scams, Stories, and Secrets from the Trillion-Dollar Fraud Industry by Kelly Richmond Pope. Copyright 2023 Kelly Richmond Pope. All rights reserved.
I was doing my morning reading before class, and a story about a reformed cybercriminal caught my attention. I always wanted to learn more about cybercrime, but I’d never interacted with a convicted cyber offender. Here was my chance.
I did a quick Google search and found his personal website. I reached out, explained my interest in his story, and waited. By evening, I had an email from email@example.com. I was immediately suspicious, but it was a legit address of Brett Johnson, the man from the article.
After a few email exchanges, we got on a call. He was super friendly and had the voice of a radio DJ. I invited him to come speak to my class at DePaul.
“I teach on Monday nights for the next eight weeks, so whatever works for you will work for me,” I said.
“How about I hop in my car and come visit your class this coming Monday?” he said.
I was a little shocked—Birmingham, Alabama was a long drive— but I immediately took him up on his offer.
Brett was born and raised in Hazard, Kentucky, “one of these areas like the Florida Panhandle and parts of Louisiana, where if you’re not fortunate enough to have a job, you may be involved in some sort of scam, hustle, fraud, whatever you want to call it,” he said.
Maybe there was something in the water because his entire family engaged in fraud. Insurance fraud, document forgery, drug trafficking, mining illegal coal. You name it, Brett’s family did it.
Young Brett was a natural liar. As he grew up, he participated in the family scams.
Eventually, he branched out on his own. His first scam: in 1994, he faked his own car accident. Second scam: eBay fraud.
He reached his peak in the mid-’90s, during the Beanie Baby heyday. The Royal Blue Peanut, essentially a cobalt stuffed elephant toy, sold for as much as $1,700. Only five hundred of the dolls were manufactured, making it one of the most valuable Beanie Babies.
Brett was trying to earn some extra money. A Beanie Baby scam seemed easy and quick.
He advertised on eBay that he was selling Royal Blue Peanut for $1,500. Except he was actually selling a gray Beanie Baby that he dipped in blue dye to look like Royal Blue Peanut for $1,500.
He accepted a bid and instructed the winner to send a US postal money order. “It protects us both,” he said via email. “As soon as I get that and it clears, I’ll send you your elephant.”
The bidder sent Brett the money order; Brett cashed it and sent her his version of the blue Beanie Baby. The phone rang almost immediately.
“This is not what I ordered!” yelled a voice on the other line.
Brett’s response was swift. “Lady, you ordered a blue elephant. I sent you a blue-ish elephant.”
Brett gave her the runaround for a few weeks until she finally disappeared.
This experience taught Brett two very important lessons about cybercrime:
Delay the victim as long as possible.
Victims rarely report the crime and eventually go away.
Brett continued to perfect his skills and graduated to selling pirated software. From pirated software, he moved to install mod chips (a small electronic device used to disable artificial restrictions of computers or entertainment devices) into gaming systems so owners could play the pirated games. Then he began installing mod chips in the cable boxes that would turn on all the pay-per-view on clients’ TV channels for free. Then it was programming satellite DSS cards (the satellite DSS card allows access to tv channels).
He was getting requests for his cable boxes from customers all over the United States and Canada. He was on a roll. Finally, it occurred to him: Why even fulfill the cable box order? Just take the money and run. He knew that no customer would complain about losing money in an illegal transaction. He stole even more money with this updated version of his cable box scam but soon worried that he’d get flagged for money laundering. He decided he needed a fake driver’s license so he could open up a bank account and launder the money through cash taken out of the ATM.
He found a person online who sold fake licenses. He sent a picture, $200, and waited. He waited and waited. Then reality punched him in the face: He’d been scammed. The nerve.
No one hates being deceived more than someone who deceives for a living. Brett was so frustrated he started ShadowCrew.com, an online forum where people could learn the ins and outs of cybercrime. Forbes called it “a one-stop marketplace for identity theft.” The ShadowCrew operated from August 2002 through November 2004, attracting as many as four thousand criminals or aspiring criminals. It’s considered the forerunner of today’s cybercrime forums and marketplaces; Brett is known as the Godfather of Cybercrime.
“Before ShadowCrew, the only avenue you had to commit online crime was a rolling chat board,” he told my students. “It’s called a IRC chat session and stands for Internet Relay Chat.” The problem with these rolling chat screens was that you had no idea if you were talking to a cop or a crook. Either was possible.
ShadowCrew gave criminals a trust mechanism. It was a large communication channel where people in different time zones could reference conversations. “By looking at someone’s screen name, you could tell if you could trust that person, if you could network with that person, or if you could learn from that person,” he said. The screen name on the dark web became the criminal’s brand name. They keep this brand name throughout their entire criminal tenure and it helps establish trust with others, so the screen name matters.
When Brett was in class, he showed my students how information ended up on the dark web. “You can find social security numbers, home addresses, driver’s license numbers, credit card numbers on the dark web for $3,” he explained. All the information is there, practically begging to be taken.
In 2004, authorities arrested twenty-eight men in six countries, claiming they had swapped 1.7 million stolen card numbers and caused $4.3 million in losses. But Brett escaped. He was placed on the Secret Service’s Most Wanted list. After four months on the run, he was arrested.
Brett has been in and out of prison five times and spent 7.5 years in federal prison. Today he considers himself a reformed white-collar offender.